Sloan v. Auditron Electronic Corp. ( 2003 )

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
WILLIAM G. SLOAN, 
Plaintiff-Appellant,
v.  No. 02-1787
AUDITRON ELECTRONIC CORPORATION,
Defendant-Appellee.

Appeal from the United States District Court
for the Northern District of West Virginia, at Clarksburg.
Irene M. Keeley, Chief District Judge.
(CA-01-70)
Argued: April 2, 2003
Decided: June 5, 2003
Before TRAXLER and KING, Circuit Judges, and
HAMILTON, Senior Circuit Judge.
Affirmed by unpublished per curiam opinion.
COUNSEL
ARGUED: Perry Wayne Oxley, OFFUTT, FISHER & NORD, Hun-
tington, West Virginia, for Appellant. Megan Dowd Dortenzo, STEP-
TOE & JOHNSON, P.L.L.C., Clarksburg, West Virginia, for
Appellee. ON BRIEF: Holly G. DiCocco, OFFUTT, FISHER &
NORD, Huntington, West Virginia, for Appellant. Michael T. Smith,
STEPTOE & JOHNSON, P.L.L.C., Clarksburg, West Virginia, for
Appellee.
2 SLOAN v. AUDITRON ELECTRONIC CORP.
Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).
OPINION
PER CURIAM:
William G. Sloan appeals from an order of the district court award-
ing summary judgment to Auditron Electronics Corporation ("AEC")
on Sloan’s claims that Auditron infringed his registered service mark
and violated the Anticybersquatting Consumer Protection Act. We
affirm.
I.
In 1965, Sloan applied for federal trademark registration of a styl-
ized depiction of the word "Auditron." The distinctive lettering used
in the proposed mark included a large A which was extended to
underline the other letters, all of which were upper case except for the
letter "i"; additionally, the letters used in the mark were light in color
and were emblazoned upon a dark background. Sloan’s application
indicated that he was using the mark in connection with his "Book-
keeping and Accounting and Tax Service." J.A. 677. Sloan selected
the name Auditron as shorthand for "audit electronically." The Patent
Office registered AUDITRON in the principal register as a service
mark, and it appeared in the same stylized lettering that Sloan submit-
ted with his application.
Sloan, who conducted business in California, continued to use the
name Auditron in connection with his accounting services, but in
1968, he stopped using the precise stylization of Auditron that was
registered as a service mark. Sloan acknowledges that he then began
experimenting with different stylizations of the name Auditron. He
claims to have used the name Auditron continuously from the time he
obtained his registration; the form or style he used to depict the name
Auditron, however, has differed from that which was approved for
registration. Sloan sold the business to his son Scott in 2000. He con-
tends that he granted permission for Scott to use the registered mark,
but that he maintained ownership of the mark.
SLOAN v. AUDITRON ELECTRONIC CORP. 3
AEC was incorporated in Pennsylvania in 1978, and its primary
business was "the manufacture and distribution of High Fidelity
House speakers and components." J.A. 712. AEC was interested in
adopting the name Auditron because it contains elements of the words
"audio" and "electronics." J.A. 713. Prior to officially selecting
Auditron for its corporate name, AEC conducted a trademark search,
found Sloan’s registered mark, and sought legal advice regarding the
availability of Auditron as a corporate name. AEC determined that the
name was available for use in connection with high-fidelity speakers
because Sloan’s mark was "used to identify bookkeeping, accounting
and tax services" and thus AEC’s use of the name Auditron created
"no likelihood of confusion." J.A. 637.
By the mid-1980s, AEC’s primary product was no longer high-
fidelity speakers; instead, AEC was producing "Zymed," a computer
software program designed to help healthcare professionals manage
their practices. AEC continued to use the name Auditron after it
shifted its primary business interest from audio speakers to computer
software.
In 1998, Steven McNaughton, president of AEC, registered the
domain name "auditron.com" under which AEC maintained an inter-
net web site to promote the Zymed computer software. In October
1999, just prior to purchasing the accounting business from his father,
Scott Sloan attempted to register the domain name "auditron.com" but
learned that AEC had already done so.
Sloan then filed this action pro se, alleging that AEC’s use of the
name Auditron constituted trademark infringement under the Lanham
Act. See 15 U.S.C.A. § 1114 (West 1997 & Supp. 2003); 15 U.S.C.A.
§ 1125 (West 1998 & Supp. 2003). Sloan also alleged that AEC’s use
of the name Auditron violated the Anticybersquatting Consumer Pro-
tection Act (ACPA). See 15 U.S.C.A. § 1125(d) (West Supp. 2003).
Sloan did not assert any claims for infringement of a common law
trademark, service mark or trade name.
The district court granted summary judgment to AEC on both
claims. The court concluded as a matter of law that AEC’s use of the
Auditron name did not infringe on Sloan’s registered mark because
Sloan had abandoned the mark and that Sloan had not come forward
4 SLOAN v. AUDITRON ELECTRONIC CORP.
with sufficient facts to demonstrate that AEC’s use of the name
Auditron was likely to create confusion with Sloan’s registered mark
in the first place. On the cybersquatting claim, the district court deter-
mined that Sloan failed to present a factual basis to support the con-
clusion that, as required by the ACPA, "AEC had a bad faith intent
to profit from Sloan’s mark" when it registered the auditron.com
domain name. J.A. 1051. This appeal followed.*
II.
Sloan argues that the district court improperly granted summary
judgment to AEC on his infringement claim because questions of fact
still exist on the issue of abandonment. Under the Lanham Act, a
mark has been abandoned "[w]hen its use has been discontinued with
intent not to resume such use." 15 U.S.C.A. § 1127 (West Supp.
2003). A defendant asserting an abandonment defense is required to
show two elements: (1) plaintiff’s non-use of the mark, and (2) plain-
tiff’s lack of intent "to resume use in the reasonably foreseeable
future." Emergency One, Inc. v. American Fireeagle, Ltd., 228 F.3d
531, 535 (4th Cir. 2000) (internal quotation marks omitted). However,
if the defendant can show that plaintiff has not used the mark for three
consecutive years, then that fact alone "constitutes prima facie evi-
dence of abandonment" and "creates a presumption — a mandatory
inference of intent not to resume use." Id. at 536; see 15 U.S.C.A.
§ 1127.
Before it could consider the question of whether Sloan abandoned
his registered mark, the district court first had to determine the nature
of the mark that Sloan registered. Sloan testified to his belief that his
trademark rights were in the name Auditron, regardless of the form
in which it was depicted, rather than any specific stylization of the
name. An applicant for trademark registration is required to submit a
drawing of the mark, see 37 C.F.R. § 2.51, and must choose one of
two types of drawings: (1) a "typed drawing," which is "not limited
to the mark depicted in any special form or lettering," 37 C.F.R.
§ 2.52(a)(1), or (2) a "special form drawing," which is required when
*The district court declined to award AEC attorney fees as a "prevail-
ing party" under the Lanham Act. See 15 U.S.C.A. § 1117(a) (West
Supp. 2003). AEC did not appeal.
SLOAN v. AUDITRON ELECTRONIC CORP. 5
the mark uses "words, letters, or numbers in a particular style of let-
tering; or unusual forms of punctuation." 37 C.F.R. § 2.52(a)(2). The
district court properly concluded that Sloan submitted a special form
drawing and that "his rights in the word, ‘auditron,’ are limited to that
design and those forms that do not alter the continuing commercial
impression of that mark." J.A. 1029. To the extent that Sloan argues
on appeal that his registered mark is a word mark simply because he
subjectively intended to register such a mark, we reject the argument
for the reasons stated in the opinion of the district court.
Having concluded that Sloan had a registered design mark, the dis-
trict court turned to the issue of non-use, concluding that AEC pre-
sented sufficient evidence to show that Sloan had discontinued using
the registered mark for at least three consecutive years. Primarily, the
district court relied on Sloan’s deposition testimony that he had
"‘used the name Auditron with the line underneath it . . . up until
[1968] and then we changed it a little bit. Now we have . . . a pyramid
. . . with still the name on it.’" J.A. 1030. The court observed that the
record showed that Sloan had not used the registered mark for 30
years. Accordingly, the court concluded that AEC presented prima
facie evidence of abandonment, giving rise to the presumption that
Sloan had abandoned the mark.
When "the presumption is triggered, the legal owner of the mark
has the burden of producing evidence of either actual use during the
relevant period or intent to resume use." Emergency One, 228 F.3d at
536. In response to AEC’s motion for summary judgment, Sloan sub-
mitted an affidavit stating that Sloan "experimented with different
styles as it pertains to the name Auditron" but that he "continuously
used the name Auditron as it appears [in the principal register]." J.A.
943. Sloan claimed that his continuous use of the registered mark
included use "on wooden office signs and on various advertising
materials." J.A. 943. He did not present to the district court any evi-
dence, however, showing that the registered mark was so used. The
district court concluded that Sloan could not create a factual issue by
submitting an uncorroborated, conclusory affidavit that contradicted
earlier deposition testimony. The court also concluded that even if the
affidavit were true, at most it suggested that any continued use of the
mark was insufficient to qualify as a "bona fide use of a mark made
in the ordinary course of trade." 15 U.S.C.A. § 1127; see Emergency
6 SLOAN v. AUDITRON ELECTRONIC CORP.
One, 228 F.3d at 539 ("[T]he ‘use’ required to preserve trademark
rights does not include mere promotional or token uses.").
On appeal, Sloan resubmits the same argument rejected by the dis-
trict court. He claims that he produced sufficient evidence to create
a question of fact on the issue of non-use solely through his affidavit,
in which he claims that he used the registered mark on wooden signs
and advertising materials. We agree with the district court that Sloan
cannot create a factual question through an eleventh-hour affidavit
that contradicts his earlier, fuller deposition testimony that he stopped
using "‘the name Auditron with the line underneath it’" — that is, the
registered design mark — in 1968. J.A. 1030. Sloan executed the affi-
davit only after receiving AEC’s motion for summary judgment
which made clear the implications of his failure to use the stylized
mark precisely as registered. He proposes to create "[a] genuine issue
of material fact . . . where the only issue of fact is to determine which
of the two conflicting versions of the plaintiff’s testimony is correct,"
a proposition we have repudiated many times. Barwick v. Celotex
Corp., 736 F.2d 946, 960 (4th Cir. 1984); see Rohrbough v. Wyeth
Labs., Inc., 916 F.2d 970, 976 (4th Cir. 1990). He has pointed to noth-
ing else in the record to demonstrate his alleged continued use of the
registered mark as opposed to a different stylization of the name
Auditron. Therefore, we agree with the district court that Sloan has
not created an issue of fact regarding his continued use of the mark.
The district court recognized that even if the owner of a mark dis-
continues using the mark in its registered form, abandonment can be
avoided if the owner was using a variation of the mark where "‘the
continuing common element of the mark retains its impact and sym-
bolizes a continuing commercial impression.’" J.A. 1033 (quoting 2
J. Thomas McCarthy, McCarthy on Trademarks and Unfair Competi-
tion § 17:26 (4th ed. 1996)). The court concluded, however, that a
continuing commercial impression theory would be of no benefit to
Sloan because there was "no evidence demonstrating that the mark or
any permissible variation has been used continuously without signifi-
cant gaps." J.A. 1034. Sloan argues that the district court misapplied
this doctrine for purposes of summary judgment by concluding that
Sloan failed to present "continuing commercial impression" evidence
to rebut the presumption of abandonment. Instead, Sloan believes that
AEC, in order to establish a prima facie case of abandonment, must
SLOAN v. AUDITRON ELECTRONIC CORP. 7
show that the other stylizations used by Sloan did not create the same
continuing commercial impression. We reject this argument. AEC’s
evidence of non-use was sufficient, by itself, to trigger a presumption
that Sloan abandoned the mark; it was Sloan’s burden to rebut the
presumption. See Emergency One, 228 F.3d at 536. One way for
Sloan to have rebutted the presumption would have been to demon-
strate actual use of the mark under a continuing commercial impres-
sion theory; he did not do so. It is not AEC’s duty to make Sloan’s
argument for him and then negate it.
Finally, Sloan contends that even if the district court correctly con-
cluded that he had discontinued use of the registered mark, there was
sufficient evidence in the record of Sloan’s intent to resume use of the
mark to rebut the presumption of abandonment and preclude sum-
mary judgment. In support of this argument, Sloan highlights the affi-
davit that he executed in response to AEC’s motion for summary
judgment, as well as one executed at the same time by his son Scott.
According to Sloan’s affidavit, he intended to "maintain ownership"
of the mark and "never intended to discontinue the use of [the] trade-
mark." J.A. 943-44. Similarly, Scott Sloan attested that in 2000 Sloan
"sold his business to me, but he maintained ownership of the Auditron
trademark." J.A. 996. Sloan also contends that his renewal of the reg-
istration of his mark in 1987 demonstrates his intent to resume use of
the mark.
The district court properly rejected this argument. The court
observed that it is not enough for Sloan to have intended merely not
to relinquish ownership of the mark. To rebut the presumption of
abandonment, he must have evidence that he intended to resume
using the mark. The Fifth Circuit has noted the distinction:
There is a difference between intent not to abandon or relin-
quish and intent to resume use in that an owner may not
wish to abandon its mark but may have no intent to resume
its use. . . . An "intent to resume" requires the trademark
owner to have plans to resume commercial use of the mark.
Stopping at an "intent not to abandon" tolerates an owner’s
protecting a mark with neither commercial use nor plans to
resume commercial use.
8 SLOAN v. AUDITRON ELECTRONIC CORP.
Exxon Corp. v. Humble Exploration Co., 695 F.2d 96, 102-03 (5th
Cir. 1983). Therefore, "the owner of a trademark cannot defeat an
abandonment claim . . . by simply asserting a vague, subjective intent
to resume use of a mark at some unspecified future date." Emergency
One, 228 F.3d at 537. We agree with the district court that Sloan’s
affidavits do just that — attempt to avoid abandonment merely by
asserting a vague intention to resume use. We further agree with the
district court that Sloan’s renewal of his registration in 1987 is of no
avail. Sloan points to no concrete evidence that, in the fifteen years
that have passed since 1987, he made bona fide use of the mark or
even made plans to do so.
Accordingly, we affirm the district court’s opinion awarding sum-
mary judgment to AEC on Sloan’s infringement claim as a result of
Sloan’s abandonment of his registered mark. In light of this conclu-
sion, we need not reach the issue of whether, if Sloan had not aban-
doned the mark, AEC’s use of the name Auditron created a likelihood
of confusion with Sloan’s registered mark.
III.
Next, Sloan challenges the district court’s grant of summary judg-
ment to AEC on Sloan’s cybersquatting claim under the ACPA. Con-
gress enacted the ACPA to curb the increasing practice of
cybersquatting — "the practice of registering ‘well-known brand
names as Internet domain names’ in order to force the rightful owners
of the marks ‘to pay for the right to engage in electronic commerce
under their own brand name.’" Virtual Works, Inc. v. Volkswagen of
Am., Inc., 238 F.3d 264, 267 (4th Cir. 2001) (quoting S. Rep. No.
106-140 at 5-7 (1999)). A person is liable under the ACPA for cyber-
squatting if the person:
(i) has a bad faith intent to profit from [the] mark . . . ; and
(ii) registers, traffics in, or uses a domain name that —
(I) in the case of a mark that is distinctive . . .,
is identical or confusingly similar to that mark;
SLOAN v. AUDITRON ELECTRONIC CORP. 9
(II) in the case of a famous mark . . ., is identical
or confusingly similar to or dilutive of that mark.
15 U.S.C.A. § 1125(d)(1)(A); see Virtual Works, 238 F.3d at 267-68.
Regarding an alleged cybersquatter’s bad faith, the ACPA provides a
non-exhaustive list of nine factors for a court to consider, including
"the extent to which the domain name consists of the legal name of
the person or a name that is otherwise commonly used to identify that
person;" "the person’s prior use, if any, of the domain name in con-
nection with the bona fide offering of any goods or services;" and "the
person’s offer to transfer, sell, or otherwise assign the domain name
to the mark owner or any third party for financial gain without having
used . . . the domain name in the bona fide offering of any goods or
services." 15 U.S.C.A. § 1125(d)(1)(B)(i).
We agree with the district court that Sloan’s claim under the ACPA
fails because, at the very least, he presented no evidence to establish
bad faith on the part of AEC in registering the domain name
auditron.com. We affirm for the reasons stated by the district court in
its opinion:
There is no evidence in this case that AEC had a bad faith
intent to profit from Sloan’s mark. AEC has operated under
the trade name "Auditron Electronics Corporation" since
1978, and the record evinces that it obtained a legal opinion
from its attorney prior to using the name "auditron."
Although aware of Sloan’s mark, its attorney advised AEC
that there was no likelihood of confusion between its use of
the word "auditron" and Sloan’s use. While, over time, its
focus has changed from manufacturing and distributing high
fidelity speakers to manufacturing and distributing a man-
agement software product, its broad articles of incorporation
permitted this change.
. . . [AEC’s] niche of medical billing, specifically involv-
ing a product that enables healthcare providers to submit
claims to third party payers, is sufficiently dissimilar from
the general accounting, bookkeeping, and tax services for
which Sloan claims to have used his mark. Moreover, in
1998, AEC had a legitimate reason for registering
10 SLOAN v. AUDITRON ELECTRONIC CORP.
AUDITRON.COM as its domain name, after having used
the trade name, "auditron," for approximately 20 years. AEC
legitimately uses its website to sell its specialized product,
ZyMed, and has not offered to sell the website to others.
. . . [T]here is no evidence that AEC actually attempted,
or even contemplated an attempt, to sell the domain name
to Sloan or anyone else.
J.A. 1051-53.
IV.
For the reasons set forth above, we hereby affirm the opinion of the
district court.
AFFIRMED